Volvo Cars to focus on operational quality in dealerships in 2019

After reporting 30 percent increase in its retail sales at 2,638 units in 2018, Volvo Cars India on Thursday said the company will focus on operational quality in dealerships in 2019.

In an interview to CNBC-TV18, Richard Snijder, vice president (APEC), said, "Achieving operational quality is the name of the game this year."

According to Snijder, 2018 was a busy year with new launches and inauguration of new dealerships and in 2019 the company would like to focus on consolidation.

He said Volvo Cars would work towards providing top quality operations in dealerships, improve service networks and customer relations.

Globally, Volvo Cars sold over 640,000 units and approximately 2,600 units in India in 2018. The luxury car segment in India witnessed sales of over 40,000 cars and grew by 4 percent.

Snijder expressed satisfaction with the company's performance in 2018, "Volvo Cars grew at 30 percent, which makes it the fastest growing luxury brand in India and one of the fastest in the region. We are proud of the achievement and we have worked under tough circumstances."

By the third quarter of 2019 Volvo Cars will become the first company to assemble plug in hybrids in India, he added.

Talking on plug-in hybrids and electric vehicles, Snijder said both must be treated the same way. Currently, electric vehicles attract a 12 percent Goods and Services Tax (GST) rate, whereas hybrid vehicles attract a 43 percent GST rate.

On high tax rate, he said, "We see plug-in hybrid as the same car. If you use plug-in hybrid, you could drive all the week. With electric, it's only when you go over 40 kilometres that you need conventional engines. We are calling out to apply same electric policy on hybrids, because plug in hybrids is the way towards full electrification. Its state of the art technology and we need to introduce customers to it. Tax is a concern for us, but as it is state of the art, it is still worth paying a premium for."

Volvo Cars remained bullish on India despite the fact that the passenger car segment witnessed a slowdown in 2018. Globally too, auto sales witnessed a slowdown on account of US China trade wars and drop in sales in China.

"Headwinds would be if these trade talks come up again but we are seeing more maturity. I am not concerned about 2019, I think we will see more stability coming into the world", he said.

Snijder made it clear that Volvo Cars has made a long term commitment to the Indian market. Comparing the Indian market to China, Snijder said, "When you look at India, India is probably at a stage where China was in 2004. India is a market we take very seriously and if we look at car lines such as XC90 excellence which is our highest premium vehicle, they are already getting a great reception. This is a market which is at the stepping stone to become really great."